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The actions taken by the Convention and Arena Authority a few weeks ago to adopt the new fiscal-year operating budgets for DeVos Place, Van Andel Arena and the board itself may be invalid — according to two state statutes and an opinion from the Michigan Attorney General.

If the votes aren’t valid, it may mean the buildings and the authority cannot spend any money when the 2011 fiscal year begins July 1 — unless the board takes corrective action before that date. CAA Chairman Steven Heacock said last week that he would get the board together, before the fiscal year begins, to adopt the budgets.

“We certainly need to fully comply with the law and we will call a special meeting and make certain that we’ve crossed all the T’s and dotted all the I’s,” he said.

In three separate votes taken June 4, the CAA adopted the three budgets, but it did so with only three members present. Heacock was absent that day, which he said was only the fourth time he has been absent going back 69 meetings.

In November, Heacock suggested that the CAA realign its meeting schedule in a move to stabilize attendance. The new schedule went into effect in March.

“One of the reasons we changed the committee’s structure was to try to encourage more involvement by the board and the committee work, and we were hoping it would help us increase the quorums. Part of our problem with a quorum is we’re so small — we only have seven people — and when you have a couple people gone, you start inching toward that number,” said Heacock.

The CAA is chartered under the Convention Facility Authority Act of 1999. That state law requires a quorum, which is defined as a simple majority, to be present at a meeting in order to conduct business. The CAA is a seven-member public body, and four members are needed to have a quorum. A member can attend a meeting either in person or via a teleconference.

The CFAA also requires the board to conduct all its business in compliance with the Open Meetings Act of 1976. According to the OMA, for an action to be valid it must be approved by a majority vote of a quorum, and a quorum is the minimum number of members who must be present for a board to act.

When the CAA board convened its June meeting, it had a quorum as four members were present. As a quorum, the board approved the minutes of its May meeting. Then one member had to leave, which left the board one member shy of a quorum. After calling a brief recess and then reconvening, the remaining three members adopted the budgets. They were told by legal counsel that they could take valid actions on agenda items because the meeting began with a quorum.

But that isn’t the case, according to the OMA Handbook from the state Attorney General’s office and Robert’s Rules of Order Newly Revised. Both say “even if a meeting opens with a quorum present, a board loses its right to conduct substantive actions whenever the attendance of its members falls below the necessary quorum.”

In addition to adopting the budgets, the three board members also accepted a grant from the U.S. Department of Housing and Urban Development for $142,500. The grants funds will be used for the preliminary design, engineering and survey work to realign Butterworth Avenue NW near Millennium Park in conjunction with the outdoor amphitheater the CAA hopes to build.

Joy Yearout, deputy director of communications for the Michigan Attorney General’s office, told the Business Journal that the office wouldn’t comment on the CAA votes because it wasn’t within the office’s role to review the actions of local government in a situation like this. But Yearout did direct the Business Journal to a 2009 opinion from Michigan Attorney General Mike Cox on a similar case and to the office’s OMA Handbook. Both the opinion and the handbook indicate that a quorum needs to be present for a vote to be taken.

“I can tell you generally that it appears that no action can be taken without a quorum,” said Yearout. “I guess it would depend on that body’s definition of action, if approving a budget falls under that. But I can’t say with any authority whether that would be a violation.”

The budgets were listed as “action” items on the board’s June agenda. So was the HUD grant.

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